A roundup of some of the North American equities making moves in both directions today
On the rise
AMC Entertainment Holdings (AMC-N), the largest U.S. theater chain, soared after it aid on Monday it expects to reopen about a dozen locations in New York state starting Oct. 23 and plans to have more than 530 theaters open in the country by the end of the month.
Shares of the theater chain operator have slumped nearly 60 per cent this year.
New York Governor Andrew Cuomo said on Saturday movie theaters outside of New York City will be allowed to reopen on Oct. 23 after a months-long hiatus spurred by the COVID-19 pandemic.
While bigger chains such as AMC Entertainment, Cineworld Group and others have reopened many locations, audiences have been thin, with a delay in movie releases an added setback for the entertainment industry.
Small and mid-sized theater companies have said they may not survive the impact of the pandemic.
Last week, AMC’s Chief Executive Officer Adam Aron told Reuters the company may need to raise additional capital either entirely or mostly through equity.
Earlier this month, AMC had said that more than 80 per cent of its theaters in the country would remain open as several new movies are lined up for release in October and November.
On the decline
Brookfield Asset Management Inc. (BAM-A-T) finished lower on Monday after announcing it’s making one of its largest investments in insurance by buying a 19.9-per-cent stake in American Equity Investment Life Holding Co. (AEL-N) for at least US$750-million, after the Iowa-based provider of retirement annuities rejected a takeover bid from a pair of insurers.
Toronto-based Brookfield will first buy a 9.9-per-cent interest in American Equity for US$37 a share, pending regulatory approval – a premium of nearly 15 per cent over the company’s closing share price last Friday. By the first half of next year, Brookfield then plans to buy a further 10-per-cent stake for the same price or American Equity’s adjusted book value per share – whichever is greater.
Before the bell, an equity analyst at Citi upgraded Brookfield shares.
Cogeco Inc. (CGO-T) and Cogeco Communications Inc. (CCA-T) slipped after Altice USA Inc. (ATUS-N) and Rogers Communications Inc. (RCI.B-T) sweetened their bid to acquire the companies to $11.1-billion, while setting a time limit on their offer for the family controlled companies.
The Audet family quickly turned down the deal, which offers the clan $900-million for its stake, up $100-million. “As we did on September 2nd, 2020, following the announcement of their first unsolicited proposal, members of the Audet family unanimously reject this further proposal,” said Louis Audet, executive chairman of Cogeco, in an e-mail on Sunday evening.
He said: “Since this is apparently not registering with Rogers and Altice, we repeat today that this is not a negotiating strategy, but a definitive refusal. We are not interested in selling our shares.”
- Andrew Willis and James Bradshaw
Kinross Gold Corp. (K-T) declined after the Globe and Mail reported it is considering selling its gold mines in North and South America, moving its primary stock listing to London, and doubling down on its portfolio of assets in Russia and West Africa.
Kinross’s management believes selling its mines in the Americas and redomiciling its African and Russian business to London would make the remaining parts more valuable than they would be if all the assets were kept inside one business unit, the sources said. The Globe and Mail is not identifying the individuals because they were not authorized to speak publicly about the information, which is confidential.
- Niall McGee and Rachelle Younglai
ConocoPhillips (COP-N) gave up early gains and dipped on Monday after it agreed to buy U.S. shale oil producer Concho Resources Inc. (CXO-N) for US$9.7-billion, as the energy sector continued to consolidate amid lower fuel prices and demand.
The, low-premium, all-stock deal comes as many U.S. shale companies have been mired in losses due to weak crude prices and, unlike in past downturns, have struggled to raise new capital to restructure heavy debts.
The purchase would propel ConocoPhillips to the ranks of the top producers in the Permian Basin, the prime U.S. oilfield that stretches from West Texas to southeastern New Mexico. It also would make it the largest U.S. independent, pumping 1.5 million barrels per day (bpd).
The fifth-largest producer by volume in the Permian, Concho pumps about 319,000 bpd, from wells spread across more than half a million acres. Conoco is a major producer in two other U.S. shale fields, but pumps about 50,000 bpd in the Permian.
“Concho has been on the short list of big Permian companies attracting interest due to its large production, vast acreage and relatively low debt,” said Andrew Dittmar, M&A analyst at consultancy Enverus.
It has scant drilling acreage on federal lands, a plus given Democratic party presidential candidate Joe Biden’s proposal to ban new fracking permits on government property, he said.
Boeing Co.’s (BA-N) shares declined as American Airlines Group (AAL-Q) announced plans to return its 737 Max jets to service by the end of 2020 depending on certification of the aircraft from the Federal Aviation Administration.
The airline said it will operate a daily 737 Max flight between Miami and New York from Dec. 29 to Jan. 4, with flights available for booking from Oct. 24.
“We remain in contact with the FAA and Boeing on the certification process and we’ll continue to update our plans based on when the aircraft is certified,” the company said in an statement.
The FAA in a statement Sunday reiterated it has no timeline for approving the plane’s return to service and said it “will lift the grounding order only after FAA safety experts are satisfied that the aircraft meets certification standards.”
The Boeing 737 MAX has been grounded since March 2019 after two fatal crashes killed 346 people. The FAA expected to lift its grounding order around mid-November, sources briefed on the matter previously told Reuters, but that date could still slip.
Halliburton Co. (HAL-N) slid in the wake of posting its fourth straight quarterly loss on Monday, as the world’s second-largest oilfield services firm struggled with a plunge in demand and lower oil prices.
Halliburton, the largest hydraulic fracturing provider in the U.S., still beat analyst estimates, earning 11 US cents a share versus expectations of 8 US cents per share. The Houston, Texas-based company has undertaken aggressive cost-cutting measures, including cutting thousands of jobs.
Oil prices have recouped some of their losses from the historic lows of March and April, but fresh lockdowns in some parts of the world due to a resurgence in COVID-19 infections are threatening that recovery. U.S. oil futures were trading around $40.75 on Monday morning.
“The pace of activity declines in the international markets is slowing, while the North America industry structure continues to improve, and activity is stabilizing,” Chief Executive Officer Jeff Miller said in a statement.
Larger rival Schlumberger NV (SLB-N) on Friday posted a third straight quarterly loss and warned that the recent economic recovery remained “fragile.”
Halliburton, which last year recorded more than half of its business from North America, saw revenue from the region drop 66.6 per cent to US$984-million in the third quarter.
With files from staff and wires